ICICI BK ADR : ICICI Bank Performance Review – Quarter ended December 31, 2010

The Board of Directors of ICICI Bank Limited (NYSE: IBN) at its meeting held at Mumbai today, approved the audited accounts of the Bank for the quarter ended December 31, 2010.

Profit & loss account

• Profit after tax increased 30.5% to Rs. 1,437 crore (US$ 321 million) for Q3-2011 from Rs. 1,101 crore (US$ 246 million) for Q3-2010.
• Net interest income increased 12.3% to Rs. 2,312 crore (US$ 517 million) in Q3-2011 from Rs. 2,058 crore (US$ 460 million) in Q3-2010.
• Fee income increased 14.3% to Rs. 1,625 crore (US$ 363 million) in Q3-2011 from Rs. 1,422 crore (US$ 318 million) in Q3-2010.
• Operating expenses (including direct marketing agency expenses) increased 27.2% to Rs. 1,707 crore (US$ 382 million) in Q3-2011 from Rs. 1,342 crore (US$ 300 million) in Q3-2010, primarily due to costs relating to new branches added over the last year and full impact of cost of erstwhile Bank of Rajasthan (e-BOR) during the quarter.
• Provisions decreased 53.6% to Rs. 465 crore (US$ 104 million) in Q3-2011 from Rs. 1,002 crore (US$ 224 million) in Q3-2010.
• Profit after tax for 9M-2011 was Rs. 3,699 crore (US$ 827 million) compared to Rs. 3,019 crore (US$ 675 million) for 9M-2010.

Operating review

The Bank has continued with its strategy of pursuing profitable credit growth by leveraging on its improved fund mix, lower credit costs and efficiency improvement and cost rationalisation. In this direction, the Bank continues to leverage its expanded branch network to enhance its deposit franchise and create an integrated distribution network for both asset and liability products. At December 31, 2010, the Bank had 2,512 branches, the largest branch network among private sector banks in the country.

Credit growth

Advances increased by 15.3% year-on-year to Rs. 206,692 crore (US$ 46.2 billion) at December 31, 2010 from Rs. 179,269 crore (US$ 40.1 billion) at December 31, 2009.

Deposit growth

Savings deposits increased by 26.5% year-on-year to Rs. 64,577 crore (US$ 14.4 billion) at December 31, 2010 from Rs. 51,054 crore (US$ 11.4 billion) at December 31, 2009 and the CASA ratio increased to 44.2% at December 31, 2010 from 39.6% at December 31, 2009.

Capital adequacy

The Bank's capital adequacy at December 31, 2010 as per Reserve Bank of India's guidelines on Basel II norms was 19.98% and Tier-1 capital adequacy was 13.72%, well above RBI's requirement of total capital adequacy of 9.0% and Tier-1 capital adequacy of 6.0%.

Asset quality

Net non-performing assets decreased by 34.9% to Rs. 2,873 crore (US$ 643 million) at December 31, 2010 from Rs. 4,416 crore (US$ 988 million) at December 31, 2009. The Bank's net non-performing asset ratio decreased to 1.16% at December 31, 2010 from 2.19% at December 31, 2009. The Bank's provisioning coverage ratio computed in accordance with the RBI guidelines at December 31, 2010 was 71.8% compared to 51.2% at December 31, 2009.

Consolidated profits

Consolidated profit after tax of the Bank increased by 36.0% to Rs. 4,525 crore (US$ 1.0 billion) for 9M-2011 compared to Rs. 3,328 crore (US$ 744 million) for 9M-2010. Consolidated profit after tax for Q3-2011 increased by 77.5% to Rs. 2,039 crore (US$ 456 million) compared to Rs. 1,149 crore (US$ 257 million) for Q3-2010. This includes transfer of surplus in the non-participating policyholders' funds of ICICI Prudential Life Insurance Company (ICICI Life) on a quarterly basis, as compared to an annual basis as permitted earlier, as per Insurance Regulatory and Development Authority (IRDA) circular dated December 27, 2010. The Bank's consolidated profit after tax for 9M-2011 and Q3-2011 include Rs. 384 crore (US$ 86 million) on account of this transfer.

Insurance subsidiaries

ICICI Life maintained its position as the largest private sector life insurer based on new business retail weighted received premium during April-November 2010. ICICI Life's new business premium increased by 21.3% to Rs. 4,650 crore (US$ 1,040 million) in 9M-2011 from Rs. 3,833 crore (US$ 857 million) in 9M-2010. ICICI Life's unaudited new business profit (NBP) in 9M-2011 was Rs. 579 crore (US$ 130 million). Assets held increased by 23.7% to Rs. 66,334 crore (US$ 14.8 billion) at December 31, 2010 from Rs. 53,619 crore (US$ 12.0 billion) at December 31, 2009. ICICI Life's profit after tax for 9M-2011 was Rs. 513 crore (US$ 115 million). ICICI Life's NBP and profit after tax for Q3-2011 were Rs. 100 crore (US$ 22 million) and Rs. 614 crore (US$ 137 million) respectively. ICICI Life's profit after tax for 9M-2011 and Q3-2011 include Rs. 520 crore (US$ 116 million) on account of transfer of surplus in the non-participating policyholders' funds on a quarterly basis, as compared to an annual basis as permitted earlier, as per Insurance Regulatory and Development Authority (IRDA) circular dated December 27, 2010.

ICICI Lombard General Insurance Company (ICICI General) maintained its leadership in the private sector during 9M-2011 with a market share of 9.8%. ICICI General's premium income in 9M-2011 increased by 29.4% to Rs. 3,250 crore (US$ 727 million) from Rs. 2,512 crore (US$ 562 million) in 9M-2010. ICICI General's profit after tax was Rs. 210 crore (US$ 47 million) in 9M-2011 compared to Rs. 132 crore (US$ 30 million) in 9M-2010. ICICI General's profit after tax for Q3-2011 was Rs. 74 crore (US$ 17 million).

Summary Profit and Loss Statement (as per unconsolidated Indian GAAP accounts)

																Rs. crore
		FY2010			Q3-2010			9M-2010			Q2-2011			Q3-2011		9M-2011
Net interest income		8,114			2,058			6,079			2,204			2,312		6,507
Non-interest income		7,478			1,673			5,587			1,578			1,749		5,007
- Fee income		5,650			1,422			4,128			1,590			1,625		4,628
- Lease and other income		6471			2771			4741			132			103		398
- Treasury income		1,181			(26	)		985			(144	)		21		(19	)
Less:
Operating expense		5,593			1,311			4,134			1,500			1,667		4,592
Expenses on direct market agents (DMAs)2		125			31			80			35			40		112
Lease depreciation		142			20			119			35			11		68
Operating profit		9,732			2,369			7,333			2,212			2,343		6,742
Less: Provisions		4,387			1,002			3,397			641			465		1,903
Profit before tax		5,345			1,367			3,936			1,571			1,878		4,839
Less: Tax		1,320			266			917			335			441		1,140
Profit after tax		4,025			1,101			3,019			1,236			1,437		3,699
1. Includes profit of Rs. 203 crore related to transfer of merchant acquiring operations to new entity 81% owned by First Data.
2. Represents commissions paid to direct marketing agents (DMAs) for origination of retail loans. These commissions are expensed upfront.
3. Results for Q2-2011, Q3-2011 and 9M-2011 take into account the impact of amalgamation of erstwhile Bank of Rajasthan from close of business on August 12, 2010.
4. Prior period figures have been regrouped/re-arranged where necessary.

Summary Balance Sheet
								Rs. crore
		March 31, 2010			December 31, 2009			December 31, 2010
Assets
Cash & bank balances		38,874			30,578			31,461
Advances		181,206			179,269			206,692
Investments		120,893			123,409			133,703
Fixed & other assets		22,427			22,972			21,041
Total		363,400			356,228			392,897
Liabilities
Net worth		51,618			52,240			55,429
- Equity capital		1,115			1,114			1,151
- Reserves		50,503			51,126			54,278
Deposits		202,017			197,653			217,747
CASA ratio		41.7	%		39.6	%		44.2	%
Borrowings1		94,264			91,829			105,327
Other liabilities		15,501			14,506			14,394
Total		363,400			356,228			392,897
1. Borrowings include preference shares amounting to Rs. 350 crore.
2. Figures for December 31, 2010 take into account the impact of amalgamation of erstwhile Bank of Rajasthan from close of business on August 12, 2010.

All financial and other information in this press release, other than financial and other information for specific subsidiaries where specifically mentioned, is on an unconsolidated basis for ICICI Bank Limited only unless specifically stated to be on a consolidated basis for ICICI Bank Limited and its subsidiaries. Please also refer to the statement of audited unconsolidated, consolidated and segmental results required by Indian regulations that has, along with this release, been filed with the stock exchanges in India where ICICI Bank's equity shares are listed and with the New York Stock Exchange and the US Securities Exchange Commission, and is available on our website www.icicibank.com.

Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', ?expected to', etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the actual growth in demand for banking and other financial products and services in the countries that we operate or where a material number of our customers reside, our ability to successfully implement our strategy, including our use of the Internet and other technology, our rural expansion, our exploration of merger and acquisition opportunities, our ability to integrate recent or future mergers or acquisitions into our operations and manage the risks associated with such acquisitions to achieve our strategic and financial objectives, our ability to manage the increased complexity of the risks we face following our rapid international growth, future levels of impaired loans, our growth and expansion in domestic and overseas markets, the adequacy of our allowance for credit and investment losses, technological changes, investment income, our ability to market new products, cash flow projections, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions we are or become a party to, the future impact of new accounting standards, our ability to implement our dividend policy, the impact of changes in banking regulations and other regulatory changes in India and other jurisdictions on us, the bond and loan market conditions and availability of liquidity amongst the investor community in these markets, the nature or level of credit spreads, interest spreads from time to time, including the possibility of increasing credit spreads or interest rates, our ability to roll over our short-term funding sources and our exposure to credit, market and liquidity risks as well as other risks that are detailed in the reports filed by us with the United States Securities and Exchange Commission. ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

This release does not constitute an offer of securities.

1 crore = 10.0 million
US$ amounts represent convenience translations at US$1 = Rs. 44.71

AUDITED UNCONSOLIDATED FINANCIAL RESULTS
															(Rs. in crore)
Sr. No.	Particulars		Three months ended						Nine months ended						Year ended
			December 31, 2010			December 31, 2009			December 31, 2010			December 31, 2009			March 31, 2010
			(Audited)			(Audited)			(Audited)			(Audited)			(Audited)
1.	Interest earned (a)+(b)+(c)+(d)		6,695.96			6,089.57			18,817.60			19,879.95			25,706.93
	a) Interest/discount on advances/bills		4,161.95			3,976.36			11,889.65			13,555.95			17,372.73
	b) Income on investments		2,121.23			1,691.33			5,695.91			4,895.42			6,466.35
	c) Interest on balances with Reserve Bank of India and other inter-bank funds		95.35			108.08			275.71			494.48			624.99
	d) Others		317.43			313.80			956.33			934.10			1,242.86
2.	Other income		1,748.79			1,673.14			5,007.23			5,586.81			7,477.65
3.	TOTAL INCOME (1)+(2)		8,444.75			7,762.71			23,824.83			25,466.76			33,184.58
4.	Interest expended		4,384.22			4,031.48			12,310.43			13,800.53			17,592.57
5.	Operating expenses (e)+(f)+(g)		1,717.92			1,362.39			4,771.78			4,332.94			5,859.83
	e) Employee cost		760.47			427.02			1,960.32			1,343.09			1,925.79
	f) Direct marketing expenses		40.46			31.31			111.75			79.71			125.48
	g) Other operating expenses		916.99			904.06			2,699.71			2,910.14			3,808.56
6.	TOTAL EXPENDITURE (4)+(5) (excluding provisions and contingencies)		6,102.14			5,393.87			17,082.21			18,133.47			23,452.40
7.	OPERATING PROFIT (3)–(6) (Profit before provisions and contingencies)		2,342.61			2,368.84			6,742.62			7,333.29			9,732.18
8.	Provisions (other than tax) and contingencies		464.27			1,002.16			1,903.23			3,397.11			4,386.86
9.	Exceptional items		..			..			..			..			..
10.	PROFIT/(LOSS) FROM ORDINARY ACTIVITIES BEFORE TAX (7)–(8)–(9)		1,878.34			1,366.68			4,839.39			3,936.18			5,345.32
11.	Tax expense (h)+(i)		441.32			265.62			1,140.12			916.77			1,320.34
	h) Current period tax		570.33			463.13			1,580.53			1,258.47			1,600.78
	i) Deferred tax adjustment		(129.01	)		(197.51	)		(440.41	)		(341.70	)		(280.44	)
12.	NET PROFIT/(LOSS) FROM ORDINARY ACTIVITIES (10)–(11)		1,437.02			1,101.06			3,699.27			3,019.41			4,024.98
13.	Extraordinary items (net of tax expense)		..			..			..			..			..
14.	NET PROFIT/(LOSS) FOR THE PERIOD (12)–(13)		1,437.02			1,101.06			3,699.27			3,019.41			4,024.98
15.	Paid-up equity share capital (face value Rs. 10/-)		1,151.47			1,114.17			1,151.47			1,114.17			1,114.89
16.	Reserves excluding revaluation reserves		54,277.68			51,126.33			54,277.68			51,126.33			50,503.48
17.	Analytical ratios
	i) Percentage of shares held by Government of India		..			..			..			..			..
	ii) Capital adequacy ratio		19.98	%		19.40	%		19.98	%		19.40	%		19.41	%
	iii) Earnings per share (EPS)
	a) Basic EPS before and after extraordinary items, net of tax expenses (not annualised for quarter/period) (in Rs.)		12.48			9.89			32.64			27.12			36.14
	b) Diluted EPS before and after extraordinary items, net of tax expenses (not annualised for quarter/period) (in Rs.)		12.41			9.84			32.48			27.01			35.99
18.	NPA Ratio1,2
	i) Gross non-performing advances (net of write-off)		10,186.62			8,925.55			10,186.62			8,925.55			9,480.65
	ii) Net non-performing advances		2,872.74			4,356.83			2,872.74			4,356.83			3,841.11
	iii) % of gross non-performing advances (net of write-off) to gross advances		4.75	%		4.84	%		4.75	%		4.84	%		5.06	%
	iv) % of net non-performing advances to net advances		1.39	%		2.43	%		1.39	%		2.43	%		2.12	%
19.	Return on assets (annualised)		1.46	%		1.27	%		1.31	%		1.13	%		1.13	%
20.	Public shareholding
	i) No. of shares		1,151,422,189			1,114,131,968			1,151,422,189			1,114,131,968			1,114,845,314
	ii) Percentage of shareholding		100			100			100			100			100
21.	Promoter and promoter group shareholding
	i) Pledged/encumbered
	a) No. of shares		..			..			..			..			..
	b) Percentage of shares (as a % of the total shareholding of promoter and promoter group)		..			..			..			..			..
	c) Percentage of shares (as a % of the total share capital of the bank)		..			..			..			..			..
	ii) Non-encumbered		..			..			..			..			..
	a) No. of shares		..			..			..			..			..
	b) Percentage of shares (as a % of the total shareholding of promoter and promoter group)		..			..			..			..			..
	c) Percentage of shares (as a % of the total share capital of the bank)		..			..			..			..			..
1.	At September 30, 2010, the gross non-performing advances (net of write-off) were Rs. 10,141.16 crore (June 30, 2010: Rs. 9,829.03 crore) and the net non-performing advances were Rs. 3,145.23 crore (June 30, 2010: Rs. 3,456.18 crore). At September 30, 2010, the percentage of gross non-performing advances (net of write-off) to gross advances (net of write-off) was 5.03% (June 30, 2010: 5.14%) and percentage of net non-performing advances to net advances was 1.62% (June 30, 2010: 1.87%).
2.	At December 31, 2010, the percentage of gross non-performing customer assets to gross customer assets was 3.99% and net non-performing customer assets to net customer assets was 1.16%. Customer assets include advances and credit substitutes.

SUMMARISED UNCONSOLIDATED BALANCE SHEET
		(Rs. in crore)
Particulars		At
		December 31, 2010		December 31, 2009		March 31, 2010
		(Audited)		(Audited)		(Audited)
Capital and Liabilities
Capital		1,151.47		1,114.17		1,114.89
Reserves and surplus		54,277.68		51,126.33		50,503.48
Deposits		217,746.83		197,652.94		202,016.60
Borrowings (includes preference shares and subordinated debt)		105,326.58		91,828.63		94,263.57
Other liabilities		14,394.40		14,506.28		15,501.17
Total Capital and Liabilities		392,896.96		356,228.35		363,399.71
Assets
Cash and balances with Reserve Bank of India		18,134.62		18,044.05		27,514.29
Balances with banks and money at call and short notice		13,325.99		12,534.19		11,359.40
Investments		133,702.67		123,408.81		120,892.80
Advances		206,692.01		179,269.09		181,205.60
Fixed assets		4,730.73		3,301.55		3,212.69
Other assets		16,310.94		19,670.66		19,214.93
Total Assets		392,896.96		356,228.35		363,399.71

CONSOLIDATED FINANCIAL RESULTS
											(Rs. in crore)
Sr. No.	Particulars		Three months ended				Nine months ended				Year ended
			December 31, 2010		December 31, 2009		December 31, 2010		December 31, 2009		March 31, 2010
			(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Audited)
1.	Total income		15,415.85		14,176.84		43,415.71		43,387.75		59,599.77
2.	Net profit		2,039.40		1,148.66		4,525.34		3,328.49		4,670.29
3.	Earnings per share (EPS)
	a) Basic EPS (not annualised for quarter/period) (in Rs.)		17.72		10.31		39.92		29.89		41.93
	b) Diluted EPS (not annualised for quarter/period) (in Rs.)		17.57		10.26		39.66		29.75		41.72

UNCONSOLIDATED SEGMENTAL RESULTS OF ICICI BANK LIMITED
											(Rs. in crore)
Sr. No.	Particulars		Three months ended				Nine months ended				Year ended
			December 31, 2010		December 31, 2009		December 31, 2010		December 31, 2009		March 31, 2010
			(Audited)		(Audited)		(Audited)		(Audited)		(Audited)
1.	Segment revenue
a	Retail Banking		3,969.36		4,272.94		11,740.92		13,706.20		17,724.41
b	Wholesale Banking		5,022.99		4,378.46		13,863.06		15,013.62		19,254.13
c	Treasury		6,189.25		5,556.84		17,305.39		19,323.85		24,797.80
d	Other Banking		126.48		68.50		330.96		307.62		437.57
	Total revenue		15,308.08		14,276.74		43,240.33		48,351.29		62,213.91
	Less: Inter segment revenue		6,863.33		6,514.03		19,415.50		22,884.53		29,029.33
	Income from operations		8,444.75		7,762.71		23,824.83		25,466.76		33,184.58
2.	Segmental results (i.e. Profit before tax)
a	Retail Banking		(127.86)		(231.97)		(461.93)		(991.19)		(1,333.51)
b	Wholesale Banking		1,306.60		1,067.92		3,447.12		2,593.55		3,645.10
c	Treasury		653.32		469.72		1,740.44		2,167.42		2,788.64
d	Other Banking		46.28		61.01		113.76		166.40		245.09
	Total segment results		1,878.34		1,366.68		4,839.39		3,936.18		5,345.32
	Unallocated expenses		..		..		..		..		..
	Profit before tax		1,878.34		1,366.68		4,839.39		3,936.18		5,345.32
3.	Capital employed (i.e. Segment assets – Segment liabilities)
a	Retail Banking		(82,322.44)		(41,176.77)		(82,322.44)		(41,176.77)		(44,905.31)
b	Wholesale Banking		72,734.56		25,695.90		72,734.56		25,695.90		26,929.31
c	Treasury		58,225.70		61,258.48		58,225.70		61,258.48		63,238.40
d	Other Banking		632.94		637.38		632.94		637.38		470.63
e	Unallocated		6,158.39		5,798.51		6,158.39		5,798.51		5,885.34
	Total		55,429.15		52,240.50		55,429.15		52,240.50		51,618.37

Notes on segmental results:

1. The disclosure on segmental reporting has been prepared in accordance with Reserve Bank of India (RBI) circular no. DBOD.No.BP.BC.81/21.04.018/2006-07 dated April 18, 2007 on guidelines on enhanced disclosures on ?Segmental Reporting? which is effective from the reporting period ended March 31, 2008.
2. ?Retail Banking? includes exposures which satisfy the four criteria of orientation, product, granularity and low value of individual exposures for retail exposures laid down in Basel Committee on Banking Supervision document ?International Convergence of Capital Measurement and Capital Standards: A Revised Framework?.
3. ?Wholesale Banking? includes all advances to trusts, partnership firms, companies and statutory bodies, which are not included under Retail Banking.
4. ?Treasury? includes the entire investment portfolio of the Bank.
5. ?Other Banking? includes hire purchase and leasing operations and other items not attributable to any particular business segment.

Notes:

1. The financial statements have been prepared in accordance with Accounting Standard (AS) 25 on ?Interim Financial Reporting'.

2. The Bank of Rajasthan Limited (Bank of Rajasthan), a banking company incorporated under the Companies Act, 1956 and licensed by RBI under the Banking Regulation Act, 1949 was amalgamated with ICICI Bank Limited (ICICI Bank) with effect from close of business of August 12, 2010 in terms of the Scheme of Amalgamation (the Scheme) approved by the Reserve Bank of India vide its order DBOD No. PSBD 2603/16.01.128/2010-11 dated August 12, 2010 under sub section (4) of section 44A of the Banking Regulation Act, 1949. The consideration for the amalgamation was 25 equity shares of ICICI Bank of the face value of Rs. 10/- each fully paid-up for every 118 equity shares of Rs. 10/- each of Bank of Rajasthan. Accordingly, ICICI Bank allotted 31,323,951 equity shares to the shareholders of Bank of Rajasthan on August 26, 2010 and 2,860,170 equity shares which were earlier kept in abeyance pending civil appeal, on November 25, 2010.

3. Insurance Regulatory and Development Authority (IRDA) has issued a clarification dated December 27, 2010 stating that the surplus arising on the non-participating policyholders' funds may be recognised in the profit and loss account on a quarterly basis instead of only at financial year-end. Consequent to this clarification, ICICI Prudential Life Insurance Company (ICICI Life) has transferred the surplus on the non-participating policyholders' funds in the profit and loss account during the nine months ended December 31, 2010 (9M-2011). Accordingly, the net profit after tax of ICICI Life of Rs. 512.69 crore for 9M-2011 and Rs. 613.68 crore for the quarter ended December 31, 2010 (Q3-2011) includes Rs. 519.86 crore on account of transfer of surplus from non-participating policyholders' funds for 9M-2011. The Bank's consolidated net profit after tax for 9M-2011 and for Q3-2011 includes Rs. 384.12 crore on account of transfer of surplus from non-participating policyholders' funds for 9M-2011.

4. The provision coverage ratio of the Bank at December 31, 2010, computed as per the RBI circular dated December 1, 2009, is 71.8% (September 30, 2010: 69.0%, June 30, 2010: 64.8% and March 31, 2010: 59.5%). The Bank has been permitted by RBI to achieve the stipulated level of 70% in a phased manner by March 31, 2011.

5. During the three months ended December 31, 2010, the Bank has allotted 642,482 equity shares of Rs. 10/- each pursuant to exercise of employee stock options.

6. Status of equity investors' complaints/grievances for the three months ended December 31, 2010:

					Opening balance			Additions			Disposals			Closing balance
					0			25			25			0

7. Previous period/year figures have been re-grouped/re-classified where necessary to conform to current period classification.

8. The above financial results have been approved by the Board of Directors at its meeting held on January 24, 2011.

9. The above unconsolidated financial results for the three months and the nine months ended December 31, 2010 are audited by the statutory auditors, S.R. Batliboi & Co., Chartered Accountants. The unconsolidated financial results for the year ended March 31, 2010 have been audited by another firm of chartered accountants.

10. Rs. 1 crore = Rs. 10 million.

N. S. Kannan
Executive Director & CFO

ICICI Bank Limited
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